Listen to God's voice! Buffett General Meeting Commentary

・Well then, insurance is of course one of the big topics about Berkshire's earnings this morning. Evercore's David Moto is on board to talk about bi-ratings related to Travellers, Progressives, Chubb, etc. We were talking about Berkshire's insurance business in the first quarter, particularly GEICO, showing price movements, increasing margins, and reducing advertising costs. It may be an industry-wide trend, but it explains what is happening across the competitive landscape of the insurance market.

・There is a significant hard market in the personal car insurance market, and GEICO is taking quite active action in this field. The focus on profit is showing in the results, and the number of insurance policies has decreased by 13%. This is partly due to a 15% increase in insurance premiums and price increases across the industry. In the case of GEICO, the number of units has decreased considerably, thereby improving profitability. Also, you can see that advertising costs have been drastically reduced and the focus is on profit.

· I'd like to move on to earnings and a few small slides explaining what we're aiming for. Then, proceed to Q&A. Operating profit for the first quarter was reported at just over $8 billion. Operating income basically refers to Berkshire Hathaway's general profit based on GAAP. However, realized and unrealized capital gains are excluded. There are very few other items, but basically, we expect capital gains to increase over time. This is because there is no reason to hold shares. However, while overall it works well in the long run, this may not be the case over a day, quarter, year, or even 5 years. There were incredible and incredible successes in the business world, but there were also extreme cases like Godzilla during World War II. This time, too, the situation was extreme. A good system was lacking, and people shopped and didn't wait for sales. If something didn't sell, I put something else in the backlog. It was a very peculiar time. However, that period is over, and employment is not about to plummet, but the situation is different from six months ago, and many managers are responding to the changes. Next, I'd like to move on to earnings and a few small slides explaining what we're aiming for. Then, proceed to Q&A. Operating profit for the first quarter was reported at just over $8 billion. Operating income basically refers to Berkshire Hathaway's general profit based on GAAP. However, realized and unrealized capital gains are excluded. There are very few other items, but basically, we expect capital gains to increase over time. This is because there is no reason to hold shares. However, while overall it works well in the long run, this may not be the case over a day, quarter, year, or even 5 years.

・They are slightly different from bank deposits, but there is a very important difference. Interest must be paid on bank deposits, and interest is getting higher recently. You have to run a bank and do a lot of things. Basically, this money represents an unpaid loss prepaid by insurance. What is shown as net debt on balance sheets gives me an opportunity to manage funds with discretion that other insurance companies in the world do not have, as far as I know. That's because we have so much net worth, and our float (insurance underwriting) has reached 165 billion dollars. The person sitting farthest left is responsible for raising that figure so it doesn't cost us almost every year, from the 1986 bench to this incredible number. It's like a bank without employees or interest, and there's no ability to withdraw money. It's an invaluable asset for us.

・First, think about Geico and Float, the beginning of my career. When considering the balance sheet, there are assets and liabilities, and the debt side is raising funds on the asset side. Shareholders' equity is extremely expensive, and long-term debt is also temporarily cheap, but it can get expensive or expire. Floats appear as liabilities, but they don't cost anything and don't disappear suddenly. It raises capital on the asset side in the same way as shareholders' equity. Nobody else thinks of it that way, but we've always thought of it that way. And that has increased over time. Cash and government bonds up to March 31 are shown below. And I'll tell you that roughly $7 billion was added in April. Part of this is because they didn't buy many stocks, which would reduce cash and government bonds. Eventually, we bought $400 million worth of shares in April, and that's negative.

・However, I presume that cash and government bonds probably increased by 600 to 700 million dollars per month, with sales income of about 4 billion dollars obtained by selling stocks, and of course operating profit was probably about 2.5 billion dollars. I want people to feel all of Berkshire's cash flow. Then we move on to the last, final, additional slide.

・It depends on factors such as hurricanes and earthquakes, but in the future, probabilistically, there is a high possibility that this year's insurance underwriting will be a better year than last year.

・Let's move on to the second slide. The reason we provide these operating profit figures is so that people can grasp the progress since the pandemic began and an overview based on the previous year. As you know, we've kept all our profits. Thus, it maintains between $30 billion and $35 billion per year, or more. This is expected to increase operating profit over time. This figure should be significantly higher in the next 5, 10, and 15 years. This is because we have the advantage of maintaining profits. That's why we've reached these numbers, which made little sense when we started, but we've grown by maintaining our profits. A rise in these numbers is not a huge success, as we will continue to maintain profits going forward. What we want is for them to rise at a reasonable rate. Historically, it has sometimes risen at an irrational rate, but now we're working on a much smaller scale.

・This question comes from Ben Norm from Minneapolis, who has been a Berkshire shareholder for 30 years and has attended many Berkshire meetings. He is participating again this year. This question is addressed to Ajit and Gregg. He asked last year about GEICO and BNSF being outnumbered by their respective major competitors. GEICO is about telematics, and BNSF is about precision schedule railways. Ajit answered that he expected GEICO to progress in 1 to 2 years. Greg spoke about his pride in BNSF, but did not directly address the threat of precision schedule railways. We'd love to hear your thoughts on each of these competitive challenges and our strategies to address them.

・Regarding GEICO and telematics, I would like to observe that GEICO is definitely actively working on it and is making rapid progress to fill the gap with competitors. In relation to telematics and competitors, approximately 90% of all new businesses now include telematics elements in their pricing decisions. Unfortunately, less than half of them are used by policyholders. Another thing I want to say is that even if we have achieved improvements that fill the telematics gap, we have yet to start reaping real benefits. Technology is the main source of bottlenecks.

· It's a very good result, but you can't take it to the bank. That's because two unusual items contribute to that. First, there is something called a reserve for the previous year (prior year reserves). The provision for the previous year was reduced, and that contributed. Also, the first quarter of each year tends to be a good seasonally good quarter for car insurance. When these two factors are put together, Geico is expected to end up with a combined ratio of just under 100 to target 6.

· Instead of getting excited, the key is to understand that even if you reach 96, it's a result of losing a policyholder. There is a trade-off between profitability and growth. Obviously, it will be two years before we return to a trajectory where we focus on profit and don't want growth, and continue to fight for both profitability and growth.

・Todd Combs chose to return to GEICO in order to tackle the problem of matching rates for risk, which is the essence of insurance. He arrived just before the start of the pandemic with good timing. A lot has changed, but Todd is doing a great job at GEICO. He works closely with GE and has a home in Omaha so he sometimes comes back here to spend the weekend with us.

・It has been reported that among the companies that started in the past 10 years, there are companies that no one has generally heard of. As far as I know, one company has achieved overwhelming success among them. It is a company founded by GE and people in collaboration to develop the new business “Berkshire Hathaway.” Right now, this special company probably has billions of dollars in assets with more faults than all of these companies combined.

・I have questions about AI and robotics.

· Malia, who reported a huge loss of time, did not need capital. However, there are companies that generally nobody has heard of. As far as I know, among the companies that started in the past 10 years, there is one company that has achieved overwhelming success. It is a company founded to develop a new business “Berkshire Hathaway” in collaboration with GE. Right now, this special company has billions of dollars in assets with probably more floats than all of these companies combined.

・Hello, this is Dallas Z. Question from Santa Clara, California. Considering the rise of innovative technologies that greatly improve productivity and AI is one of them, I would like to ask Charlie and Warren. What does the future of value investing look like in the new era? What new principles and approaches do you think investors should adapt to? And what are the recommendations for investors to continue to succeed in a rapidly changing landscape? Thank you very much.

・Warren stated that we will face an even tougher situation in the future as many competitors enter the market as value investors decline. We are advising value investors to get used to falling profits. However, they argue that technological advancements don't take away opportunities, and that other people do stupid things create opportunities. Therefore, it is conceivable that there will be plenty of opportunities in the future.

・It can be said that in the 58 years we started running Berkshire Hathaway, the number of people doing stupid things has increased. Part of the reason is that fundraising is now much easier than before. Even if you set up 10 or 15 stupid insurance companies in the past 10 years, you can hopefully become a wealthy person. But when this is done on a large scale, they do stupid things that were unthinkable 50 years ago.

· Currently, there are funds in the hands of many smart people, and they are trying to outdo each other and aim to get more money out of other people. This is a completely different world from the one we started in, and while there are opportunities, unpleasant events can also occur. In an area where these people compete, attempts to excel will continue.

・Berkshire does not need to match bonds when carrying out similar transactions such as contracts with AIG. These assets, along with liquid assets, are placed in a general asset pool and assets are managed. They say this is something only Berkshire can do, and that no other insurance company can do.

・At the moment, the amount we have had to pay is modest, and they will be able to correct me if I have provided incorrect information. The amount we pay based on the percentage of losses we incur is thought to be slightly lower than anticipated.

・Regarding AIG transactions, one way to check the extent to which the transaction functions is to compare the actual payment amount with the expected payment amount based on predictions at the time the transaction is carried out. These two numbers are very close. Specifically, the actual payment amount was 96% of the expected payment, which is good but not great. It's still on the rise, but when it was decided to pay less than expected, they borrowed money at a very attractive interest rate, and as of 1990, they earned a fee of 1 million dollars. Looking at it on the internet, I'm very satisfied with the transaction, but there are also issues for which no solution has been found.

· Berkshire Hathaway general insurance companies have four times more money than normal behind shareholders' equity and premium premiums. Also, more than 2.5 billion dollars flow in each year from sources of income unrelated to insurance, and since there are no obligations, dividends are not paid or excessive in debt. Furthermore, Berkshire Hathaway is overwhelmingly strong in the insurance industry and has payment capabilities unrivaled by other companies, so it can pay 1 billion dollars. Berkshire Hathaway earns large amounts of revenue each month, has almost no debt, and has debts only in the rail and energy sectors, but there are no guarantees.

· The questioner asked about the importance of planning who will run the business if the founder of the business is gone. They pointed out that their kids were unprepared and asked for advice on how to prepare to take over the business.

Buffett revealed that he spends a lot of time on this issue and said it's important to give kids the skills and knowledge they need. He questioned whether the key is for business owners to inherit their skills and whether they are right for the business. He also emphasized that it is important for business owners to choose reliable partners and boards of directors, and said that it is necessary to think carefully about how to run the business. Also, he said that plans for taking over a business are just as important as when running a business and need to be constantly updated to reflect the latest developments.

・Warren Buffett stated that “it depends on the family” regarding inheritance division. It explains that there are many factors in inheritance division, and that there are various factors, such as how families feel about each other and what kind of business they have. He stated that having shares in Berkshire is a simple matter for them, but it doesn't suit everyone, and that what is important to families is relationships, not limited to inheritance division.

・If children are unable to come to terms with each other, it is important to deal with them appropriately. If you want your kids to have specific values, it's important to discuss how you actually live those values and how to teach them. Wills should be expressed as children grow up so that they do not contradict their values. Also, it is necessary to make a plan according to the scale of the inheritance, and there is a difference between when there is a family business and when there are marketable securities. As the scale increases, issues related to inheritance may increase, and in that case, reconciliation between heirs is important.

・It is said that when a company is acquired, the company is operated by taking on the personnel of that company instead of dismissing the personnel of that company. Also, it is said that when selling to private equity funds, they will begin to consider exit strategies when signing contracts. Further, we will move on to the banking industry.

・This question is from Don Glickstein from Seattle. He pointed out that while Warren is criticizing how the Norfolk Southern Railway train derailment was handled, he is silent about BNSF's actions. In March this year, the federal court ruled that BNSF had deliberately breached the contract by transporting long trains of crude oil in tribal areas in Washington state and was acting illegally. In the same month, a BNSF train derailed in a tribal area, spilling oil into places impacting the environment. He is concerned that, after more than 20 years as the owner of Berkshire, Berkshire doesn't have a system to identify and address what he calls reprehensible behavior by BNSF and other subsidiaries. Warren responded to criticism for being silent about BNSF's actions. He said that BNSF is a transporter for carrying energy, and while its business is necessary, environmental issues need to be seriously addressed. He emphasized that there are many reports and metrics regarding BNSF's sustainability efforts and that they have programs to address such issues. He also explained that since BNSF operates legally, Warren can't do anything personally, and Berkshire has a system to make sure employees are living up to their ethical responsibilities.

・In response to questions from investors, they acknowledged that the BNSF Railway Company had violated contracts to transport oil in tribal areas, and answered that discussions with tribes were continuing. The company recognizes that it is important to comply with contractual obligations and is making efforts to resolve the issue. He also explained that the train derailment accident operated by the company was dealt with quickly in cooperation with Tribe, and there was no long-term impact on the environment. Berkshire Hathaway emphasized that it is doing its utmost to fulfill its ethical responsibilities.

・This question is about the great flood in Nebraska. BNSF, the Berkshire railway company, had a large number of customers affected as the railroad was interrupted by floods and operations were delayed for more than 2 weeks. Investors are worried about how Berkshire will be held accountable to its customers. We would also like to know how BNSF will improve in case similar situations occur in the future.

・The questioner asked how many trains does BNSF operate in a year. Buffett explained that there are more than 1000 trains in service across the rail industry, and said that since BNSF is an ordinary carrier, it can carry very heavy cargo. He also added that the BNSF can now operate even in a high temperature environment of 100 degrees.

・Hello, Warren Buffett and Charlie Munger. My name is Susie Ha from China. I'm honored to be here today. Now that interest in environmental protection is growing and the government is supporting the new energy industry, what are your thoughts on the continued development of new energy? How can new energy enterprises achieve better development in the future?

・Since acquiring Berkshire Hathaway Energy (previously called MidAmerican Energy Holdings), Warren Buffett talks about what he is working to resolve environmental issues in his report every year. It has invested the largest amount of money among American utility companies, and there is still a long way to go, but it wasn't easy. This is because there are different jurisdictions across state borders. However, America's power grid is still inadequate, and the company says it is the biggest contributor to the problem.

・The questioner is asking about the development of new energies at a time when interest in environmental protection is growing. I learned about the existence of Berkshire Hathaway Energy and heard how it is contributing to new energy development. A representative of Berkshire Hathaway Energy explained that the energy transformation is currently underway globally, and that the three public utilities owned by the company operate in multiple states, and said it is necessary to consolidate each state's plans. The company aims to reduce carbon dioxide emissions by 50% by 2030 compared to 2005, and it is said that it is already on that path. However, it was explained that the company's efforts are complex, and in particular, it was shown that an appropriate transmission grid is necessary for the supply of renewable energy, which requires significant investment.

・Warren Buffett stated that his insurance company Berkshire Hathaway has an advantageous balance sheet compared to other companies, so it can handle insurance policies with large and complex risks. He emphasized that while other companies do not think the same way about insurance policies, they are working on large-scale risk insurance policies against the backdrop of the size and experience of their own balance sheets. Buffett said he had never paid more than expected in large insurance policies up until now.

· They introduced a debt guarantee deal at London Lloyd's in 1998. Since then, those debts have declined, but instead of Berkshire Hathaway taking the risk as an insured person, Lloyd's will take the risk. This is quite unusual for insurance companies, but Berkshire Hathaway has more capital compared to other insurance companies, so it is possible to carry out such large-scale insurance transactions. They forecast the amount of annual payments required after the transaction and compare them with previous payments. The payment amount so far is 96% of the predicted amount, so there is a possibility that payments will occur below the predicted amount, but profits can still be raised. However, since insurance payments are still being made, it is explained that cautious optimism is necessary in light of future risks.

・I think in industry, good periods alternate with bad periods. We can use what we get in good times and use it in bad times. We've always owned excellent companies with strong balance sheets, lots of cash, low debt. We're in a very stable state and ready to deal with whatever happens. We plan to continue buying great companies if we get the chance. However, you have to buy it at a good price. Also, we will not make acquisitions that would lose the trust of shareholders. We carry out corporate acquisitions after considering what our shareholders want and what kind of investments they are making.

・At the time the transaction was made, we predicted how much would need to be paid each year. Then, we monitor results from the conclusion of the contract by comparing it with the actual payment amount. As Bernie mentioned, these two numbers are very close. Specifically, the actual payment amount is 96% of the forecast amount at the moment, which is good, but not fantastic. If you pay less than the forecast amount, you'll be borrowing money at a very attractive interest rate. Additionally, you can receive fees that amount to $1 million as of 1990. This is more profitable than we expected. Therefore, on the net, we are very happy with this deal. We're glad we did this, but it's not over yet. Responsibility will continue to come upon us. We are cautiously optimistic that this deal will yield results beyond our expectations.

・Berkshire Hathaway has a strong financial base as an insurance company, and has revenues of over 25 billion dollars each year from sources other than insurance. Since dividends are not paid, business can continue even when dividends are reduced. In terms of assets and liabilities, the railway and energy sectors have a lot of debt, while the insurance sector has relatively few debts.

・Berkshire Hathaway has revenue of 2.5 billion dollars or more in fields other than insurance, and does not pay dividends. If you pay dividends and cut them, you won't be able to rely on insurance. When Berkshire Hathaway receives 1 billion dollars, it does not invest in 5- or 10-year bonds and has monthly returns. Also, they don't have a lot of debt. Berkshire Hathaway's presence is due not only to the strong capital power of insurance companies, but also to stable monthly earnings. However, debts are not guaranteed.

・It talks about Berkshire Hathaway's business model. The company is said to have an extremely strong balance sheet since it generates profits of over $25 billion a year not only among insurance companies but also from a wide range of businesses and has almost no debts. Furthermore, it is emphasized that the company's creditworthiness is very high, and even with huge transactions exceeding 1 billion dollars, it has a strong financial base that other companies do not have. Also, it has been stated that the company's business model is highly unique, and since it uses management methods different from other companies, there are no competitors.

It talks about Berkshire Hathaway's business model. The company is said to have an extremely strong balance sheet since it generates profits of over $25 billion a year not only among insurance companies but also from a wide range of businesses and has almost no debts. Furthermore, it is emphasized that the company's creditworthiness is very high, and even with huge transactions exceeding 1 billion dollars, it has a strong financial base that other companies do not have. Also, it has been stated that the company's business model is highly unique, and since it uses management methods different from other companies, there are no competitors

・Warren Buffett was thanked by his former employees for saving a company called Farmers. Employees expressed their gratitude for saving the company and employees, including themselves and their families. Buffett talks about America's strength, and while recognizing that there is a risk of undermining that strength, he believes it is the best country to create an America with shortcomings. Buffett talked about the challenges facing modern society and what we need to adapt to overcome them. He also expressed optimism about America's future and its remarkable capabilities.

・Manual Report Berkshire will always hold cash and U.S. bond covers. Also, we avoid actions that require cash when it is not convenient, such as financial panics.

And an unprecedented loss of insurance claims. After Warren passed away, his A shares were converted into B shares and distributed to various foundations. Then, the foundation sells shares according to the cause. Overseas, it is said that the total stock sold by Warren takes 12 to 15 years. I worry that corporate raiders like Chiral Icon and Group will buy up enough of these stocks to control Berkshire, completely ignoring the philosophy of warrants and holding a lot of cash in US bonds, and instead become greedy and reckless.

And it's highly speculative, ruining Berkshire's position as a strong financial stronghold. Also, Warren and Charlie are concerned that this could happen, and they are worried about creating subsidiaries and running Dew. It was stated.

・I always carry cash and US bonds, and prepare for financial crises and insurance losses. Also, after Warren Buffett's death, his shares were distributed to the Foundation, which sold it for their own purposes. However, there are also those who are concerned that the company will deviate from the Buffett philosophy by replacing shareholders. However, the company should be treated as a national asset, which means that the company is prepared to survive no matter what happens.

・Question from Mr. North One of the reasons we're here is that you're great storytellers, and you're bringing those stories back to your hometown. Can you talk about it? Some stories I've never heard before. It's about Abel and Jane

・In 1986, G decided to enter the reinsurance business, and although they had been in business for 17 years, they didn't try to improve the system and got into the game. Later, they were funded by insurance experts who met G. and achieved success in the market. G. was recognized as one of the 10 insurance managers in the world, and I still talk to him. He places emphasis on people rather than educational background, and is not particular about the school he went to.

・Woberffett also talked about another person. About Ben Rosner, the person who worked for the company I bought. Mr. Ben has detailed knowledge about the retail industry and Illinois region, which he has acquired through self-education, and he has looked at every aspect of the business. Also, it is said that Mr. Ben had a sense of duty, such as giving half of the profit to the wife of a wealthy person

・The moderator introduces another question. The question is from Chai GOHILL. “The reinsurance industry is in the toughest pricing environment for the past 15 years. Berkshire has historically participated in these stressful times when economic returns are extremely attractive. This year, A. Biers Berkshire showed no interest in investing resources into Property Cat Reinsurance, but nonetheless. Despite such strong returns. Please tell us more about why you didn't participate in Spicy Returns. Also, what are your thoughts on the reinsurance business after the acquisition of Allegheny?”

・Berkshire officers answered. “As for Allegheny, they handle operating units independently, and Algamy continues to operate under the brand name, and there are no changes in strategy or management. Regarding Strawberry Cash, it has been mentioned that investment in the real estate insurance business has increased, and the investment portfolio is unbalanced. However, the investment amount has reached the limit of capacity, and profit margins are healthy. However, there are risks due to natural disasters such as hurricanes. Also, in response to requests to actively invest, it has been mentioned that the current investment amount is viewed as an exposure of approximately 55% of the entire company.”

・Question from Guadalajara, Mexico. “I have a question for Warren and Charlie. Businesses face an eternal dilemma between bots that make products that can make profits and bots that increase their competitiveness. In the best case, you can make a product that has both characteristics at the same time, as Google did. But in most cases, businesses must choose between short-term profit and long-term scope of defense.

For example, Amazon initially did it, which is famous for its limited profits, in order to refrain from obtaining stronger network effects in the hope that Amazon will obtain a wider range of benefits in the future. You've always talked about the importance of building competitive boats. The dilemma is basically buying short-term profits and securing long-term defense capabilities, but what advice would you give CEOs on how to balance this?”

· They have stated that they aim to find good businesses while not being pressured by investors or shareholders and are free to commit their own mistakes. Also, understanding consumer behavior is important for business success. I'm not familiar with the technical aspects of investing, but I understand consumer behavior. They're always learning, and they're trying to understand why good businesses turn into bad ones and how to stay competitive. Finally, they need big ideas and are working hard to find businesses.

・Mr. Buffett mentioned the five largest trading companies in Japan Warren Buffett talked about an episode where a simple investment in Japan was a huge opportunity for Berkshire Hathaway. Berkshire found 5 real companies with deals that make a profit of about 14% on the amount they plan to pay to buy. Dividends were paid properly, and stock buybacks were also being carried out. Berkshire bought more than 5% of these companies and then bought more. Currently, Berkshire owns 7.4% of companies, but without their consent, it would not exceed 9.9%. Berkshire is the largest borrower outside of Japanese companies, but it does business directly in Japan. Investment in these companies is expected to increase Berkshire's value by $4 to 500 million each year. Berkshire said it will continue to look for business opportunities in Japan.

· Question: How do you view the current ratings and price differences between US and Chinese internet companies? There were many uncertainties, such as geopolitical tension, significant cost optimizations, etc. While US temporary workers are working fiercely hard, China Tech has already experienced it all.

・While America's temporary workers are burning out, all of China's tech has already finished. There's a sense of tension. I think so in the US and China in terms of economic relationships. The tension has arisen in the wrong way on both sides. I think we're committing equally foolish sins.

・Both countries believe that they should respond kindly to foolish external acts without taking actions that increase tension. While cooperating and competing with each other, we must not drive our opponents to ruin. Understanding the circumstances these countries will face over the next 100 years will be important, and it is important for leaders and people to understand each other. It's not good to spend time playing games and not thinking about your opponent. It is important to avoid the dangers of authoritarianism and confrontation. Leaders need to explain the situation to the public and tell them not to take reckless actions. Also, the dangers of curiosity and caution are needed in a dangerous world, particularly in the context of cybersecurity and pandemics.

There are things like being good friends with China and doing a lot of free trade with China. for each other's benefit. It's a matter of course, though. That's because it's so safe, and so creative. I think for that. Partnerships with China, which is a major supplier, are important. It's good for Apple and good for China. Business with China is like that, and it's growing even more.

・About Taiwan Semiconductor: Taiwan Semiconductor is the best advantage company. It is an important company in the world. And I think the same can be said in 5, 10, and 20 years. However, I don't like the location of Taiwan. However, they should clearly be freeing up chip production capacity. And in fact, one of our subsidiaries in Allegheny is participating in Arizona.

・The next question is about EVs: about electric vehicles being insured by manufacturers rather than car insurance companies. According to a recent article in the Wall Street Journal, the number of electric cars sold is increasing even though the ratio of units sold is small, but it seems that Tesla and GM are providing them in-house. What will Geico do to counter this?

・Geico is considering selling car insurance at stores and is cooperating with many automobile manufacturers. There are still few successful cases in this sector, so we are watching the situation carefully. There are also competitors trying to catch up with Apple, but since the margin for car insurance is very small at 4%, I think it is difficult to maintain profitability. Geico is also cooperating with original equipment manufacturers to improve its own insurance.

・There is a trend where manufacturers independently provide EV insurance without relying on conventional car insurance companies, centering on automobile insurance for electric vehicles, but Geico is also seeking to provide insurance in cooperation with EV manufacturers, but it is a complicated process that requires a lot of driver data. The difficulty of improving the current system and the profitability of automobile insurance are issues.

・Regarding Berkshire shares: In 2019, Berkshire bought back a huge amount of shares, reducing and increasing the number of shares by approximately 10%. Significant value per share for continuing shareholders. Greg is expected to become CEO as Warren's successor. He will be in charge of making major capital allocation decisions, including future share buybacks, and I think he has been key in the development of Berkshire Hathaway Energy. He is the one who determines the allocation of capital. Is it involved in the fact that stock buyouts have been carried out over the past few years? Will the two of you guarantee it and work together?

・Also, it is important to carefully observe the company and take action when necessary. It is important to have a strong personal interest in the company and invest most of the net assets into the company. If management or directors have issues, changes may need to be made to keep the business running smoothly. However, it is also important to recognize that there are businesses that don't require much management, and that there are also businesses that require significant support for success. The board of directors needs to carefully evaluate candidate leaders without being influenced by Wall Street. Ultimately, being a successful leader requires facing challenges and making difficult decisions.